Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View In the context of the recent significant strengthening of the polyolefin market due to the Middle - East geopolitical situation, without considering geopolitics, PP is expected to show a pattern of increasing supply and weak demand. Multiple new production facilities are set to come online, leading to a substantial increase in supply, while downstream demand is mainly driven by rigid restocking during the traditional off - season, lacking a clear driver for growth. However, if the Middle - East situation deteriorates, it will have multiple impacts on the cost side of PP, including rising oil prices, potential disruptions to methanol and propane imports, and possible shutdowns of MTO and PDH plants, which may cause a marginal contraction in PP supply. Therefore, the impact of the Middle - East situation on the energy and chemical raw material supply chain, especially the price fluctuations and actual arrivals of methanol and propane, should be closely monitored [2]. 3. Key Points by Category Polypropylene Price Forecast and Hedging Strategy - The monthly price range forecast for polypropylene is 6900 - 7250 yuan/ton, with a current 20 - day rolling volatility of 9.38% and a 3 - year historical percentile of 10.7% [1]. - For inventory management when there is a high inventory of finished products and concerns about price drops, it is recommended to short PP2509 futures with a 25% hedging ratio in the 7200 - 7250 yuan/ton range and sell PP2509C7200 call options with a 50% hedging ratio in the 50 - 100 yuan/ton range [1]. - For procurement management when the regular inventory is low and procurement is based on orders, it is recommended to buy PP2509 futures with a 50% hedging ratio in the 6900 - 7000 yuan/ton range and sell PP2509P7000 put options with a 75% hedging ratio in the 50 - 100 yuan/ton range [1]. Market Situation Analysis - **Positive Factors**: Current plant maintenance is at a high level, leading to a marginal reduction in supply; the tense Middle - East situation has driven up oil prices, providing support for polyolefins; if the conflict persists, imports of PP raw materials propane and methanol may be restricted [5]. - **Negative Factors**: During the Dragon Boat Festival, Yulong Line 2 was put into production, and multiple facilities will be launched from June to August, significantly increasing PP production capacity; it is the off - season for downstream sales, and overall domestic demand has been weak recently due to poor profits [5]. Price and Spread Data - **Futures Prices and Spreads**: The polypropylene main contract basis, prices of PP01, PP05, and PP09 contracts, as well as various monthly spreads and the L - P spread are provided, along with their changes [6]. - **Spot Prices and Regional Spreads**: Spot prices in North China, East China, and South China, as well as regional spreads, are presented [6]. - **Non - standard and Standard Product Spreads**: Spreads between various non - standard and standard polypropylene products are given [6]. - **Upstream Prices and Processing Profits**: Prices of Brent crude oil, US propane, Northwest coal, and East China methanol, as well as processing profits from different production methods such as oil - based, coal - based, and PDH - based PP production, are included [6].